By James Pomfret and Jessie Pang
HONG KONG, Feb 26 (Reuters) - Pro-democracy media tycoon Jimmy Lai's fraud conviction and prison sentence were overturned by a Hong Kong court on Thursday, in a surprise legal decision that comes soon after Lai was jailed for 20 years on a separate national security charge.
Judges Jeremy Poon, Anthea Pang, and Derek Pang said in the judgement at the Court of First Instance that they allowed the appeal from Lai, and another defendant in the case, to proceed, as a lower court judge had "erred".
"The Court of Appeal gave them leave to appeal against their conviction, allowed their appeals, quashed the convictions and set aside the sentences," the judges wrote in a press summary of their judgement.
Even with the quashing of the fraud conviction and sentence, Lai will still remain imprisoned for 20 years in a separate national security case over two counts of conspiracy to collude with foreign forces and one for publishing seditious materials.
That case has drawn global criticism from rights groups and countries including the U.S. and Britain.
'THE JUDGE ERRED'
Lai was sentenced in December 2022 to five years and nine months in jail after being found guilty of breaching the lease terms of Apple Daily’s headquarters by concealing the operation of a private company, Dico Consultants Ltd, in the building.
Another Next Digital executive, Wong Wai-keung, 61, was found guilty of fraud and jailed for 21 months.
"In conclusion, we hold that Apple Daily Printing did not owe a duty to the Corporation to disclose its breach of the user restrictions or the non-alienation clauses occasioned by Dico’s occupation and use of the said Premises. With respect, the Judge erred," the judgement read.
"His reasoning in concluding that the applicants were liable for the concealment as the prosecution contended is unsupportable. He erred in making those findings".
In the earlier ruling, Judge Stanley Chan wrote that Lai was aware of the need to apply for a license from the Hong Kong Industrial Estates Corporation for Dico to operate at the headquarters and had "acted under the protective umbrella of a media organization".
During the appeal hearing, Lai’s lawyer Derek Chan said that Dico, a company owned by Lai, supported the publishing and printing of the newspapers apart from handling the tycoon’s private affairs.
He noted that at the start of the charge period on April 1, 1998, Dico held a 49% stake in Apple Daily and was linked to Next Animation, the studio that produced animations for the newspaper’s online news reports.
It wasn't immediately clear if the prosecution would appeal.
DETERIORATING HEALTH
Lai's son and daughter have repeatedly raised concerns over their 78-year-old father's deteriorating health and warned that he might die in prison. They couldn't be reached for immediate comment after Thursday's ruling.
Rights groups and numerous democratic countries have called for Lai's release.
Lai has suffered from retinal vein occlusion in his right eye, elevated blood pressure, weight loss, heart palpitations, progressive hearing loss and conditions relating to his fingernails, according to the sentencing judgement.
(Reporting by Jessie Pang and James Pomfret; Editing by Anne Marie Roantree, Jacqueline Wong and Saad Sayeed)
